G.R. No. 185582. February 29, 2012.
* apply in this case as the Act, as its title—An Act to Institutionalize
TUNA PROCESSING, INC., petitioner, vs. PHILIPPINE
KINGFORD, INC., respondent.
Statutory Construction; Between a general law and a special
law, the latter prevails.—In several cases, this Court had the
occasion to discuss the nature and applicability of the Corporation
Code of the Philippines, a general law, viz-a-viz other special laws.
Thus, in Koruga v. Arcenas, Jr., 590 SCRA 49 (2009), this Court
rejected the application of the Corporation Code and applied the New
Central Bank Act. It ratiocinated: Koruga’s invocation of the
provisions of the Corporation Code is misplaced. In an earlier case
with similar antecedents, we ruled that: “The Corporation Code,
however, is a general law applying to all types of corporations, while
the New Central Bank Act regulates specifically banks and other
financial institutions, including the dissolution and liquidation
thereof. As between a general and special law, the latter shall prevail
—generalia specialibus non derogant.” (Emphasis supplied)
Further, in the recent case of Hacienda Luisita, Incorporated v.
Presi-
_______________
* SECOND DIVISION.
288
28 SUPREME
8 COURT REPORTS
ANNOTATED
Tuna Processing, Inc.
vs. Philippine Kingford, Inc.
dential Agrarian Reform Council, 653 SCRA 154 (2011), this
Court held: Without doubt, the Corporation Code is the general law
providing for the formation, organization and regulation of private
corporations. On the other hand, RA 6657 is the special law on
agrarian reform. As between a general and special law, the latter
shall prevail—generalia specialibus non derogant. Following the
same principle, the Alternative Dispute Resolution Act of 2004 shall
1|Page
the Use of an Alternative Dispute Resolution System in the
Philippines and to Establish the Office for Alternative Dispute
Resolution, and for Other Purposes—would suggest, is a law
especially enacted “to actively promote party autonomy in the
resolution of disputes or the freedom of the party to make their own
arrangements to resolve their disputes.” It specifically provides
exclusive grounds available to the party opposing an application for
recognition and enforcement of the arbitral award.
Same; Alternative Dispute Resolution; Alternative Dispute
Resolution Act of 2004; Conflict of Laws; The Alternative Dispute
Resolution Act of 2004 complies with international obligations under
the New York Convention and the Model Law.—Inasmuch as
the Alternative Dispute Resolution Act of 2004, a municipal
law, applies in the instant petition, we do not see the need to discuss
compliance with international obligations under the New York
Convention and the Model Law. After all, both already form part of
the law. In particular, the Alternative Dispute Resolution Act of
2004 incorporated the New York Convention in the Act by
specifically providing: SEC. 42. Application of the New York
Convention.—The New York Convention shall govern the
recognition and enforcement of arbitral awards covered by the said
Convention. xxx SEC. 45. Rejection of a Foreign Arbitral Award.—
A party to a foreign arbitration proceeding may oppose an
application for recognition and enforcement of the arbitral award in
accordance with the procedural rules to be promulgated by the
Supreme Court only on those grounds enumerated under Article V of
the New York Convention. Any other ground raised shall be
disregarded by the regional trial court. It also expressly adopted
the Model Law, to wit: Sec. 19. Adoption of the Model Law on
International Commercial Arbitration. International commercial
arbitration shall be governed by the Model Law on International
Commercial Arbitration (the “Model Law”) adopted by
289
VOL. 667, 289
FEBRUARY 29,
 2012
Tuna Processing, Inc.
vs. Philippine Kingford, Inc.
the United Nations Commission on International Trade Law on
June 21, 1985 xxx.”
Alternative Dispute Resolution; Alternative Dispute Resolution
Act of 2004; Conflict of Laws; Sec. 45 of the Alternative Dispute
Resolution Act of 2004 provides that the opposing party in an
application for recognition and enforcement of the arbitral award
may raise only those grounds that were enumerated under Article V
of the New York Convention.—Does a foreign corporation not
licensed to do business in the Philippines have legal capacity to sue
under the provisions of the Alternative Dispute Resolution Act of
2004? We answer in the affirmative. Sec. 45 of the Alternative
Dispute Resolution Act of 2004 provides that the opposing party in
an application for recognition and enforcement of the arbitral award
may raise only those grounds that were enumerated under Article V
of the New York Convention, to wit: Article V 1. Recognition and
enforcement of the award may be refused, at the request of the party
against whom it is invoked, only if that party furnishes to the
competent authority where the recognition and enforcement is
sought, proof that: (a) The parties to the agreement referred to in
article II were, under the law applicable to them, under some
incapacity, or the said agreement is not valid under the law to which
the parties have subjected it or, failing any indication thereon, under
the law of the country where the award was made; or (b) The party
against whom the award is invoked was not given proper notice of
the appointment of the arbitrator or of the arbitration proceedings or
was otherwise unable to present his case; or (c) The award deals with
a difference not contemplated by or not falling within the terms of
the submission to arbitration, or it contains decisions on matters
beyond the scope of the submission to arbitration, provided that, if
the decisions on matters submitted to arbitration can be separated
from those not so submitted, that part of the award which contains
decisions on matters submitted to arbitration may be recognized and
enforced; or (d) The composition of the arbitral authority or the
2|Page
arbitral procedure was not in accordance with the agreement of the
parties, or, failing such agreement, was not in accordance with the
law of the country where the arbitration took place; or (e) The award
has not yet become binding on the parties, or has been set aside or
suspended by a competent authority of the country in which, or under
the law of which, that award was made. 2. Recognition and
enforcement of an arbitral award may also be refused if the
competent authority in the country where recogni-
290
29 SUPREME
0 COURT REPORTS
ANNOTATED
Tuna Processing, Inc.
vs. Philippine Kingford, Inc.
tion and enforcement is sought finds that: (a) The subject
matter of the difference is not capable of settlement by arbitration
under the law of that country; or (b) The recognition or enforcement
of the award would be contrary to the public policy of that country.
Clearly, not one of these exclusive grounds touched on the capacity
to sue of the party seeking the recognition and enforcement of the
award. Pertinent provisions of the Special Rules of Court on
Alternative Dispute Resolution, which was promulgated by the
Supreme Court, likewise support this position. Rule 13.1 of the
Special Rules provides that “[a]ny party to a foreign arbitration may
petition the court to recognize and enforce a foreign arbitral award.”
The contents of such petition are enumerated in Rule 13.5. Capacity
to sue is not included. Oppositely, in the Rule on local arbitral
awards or arbitrations in instances where “the place of arbitration is
in the Philippines,” it is specifically required that a petition “to
determine any question concerning the existence, validity and
enforceability of such arbitration agreement” available to the parties
before the commencement of arbitration and/or a petition for
“judicial relief from the ruling of the arbitral tribunal on a
preliminary question upholding or declining its jurisdiction” after
arbitration has already commenced should state “[t]he facts showing
that the persons named as petitioner or respondent have legal
capacity to sue or be sued.”
Same; Same; Same; When a party enters into  a  contract
containing  a  foreign  arbitration  clause and in  fact  submits itself
to arbitration, it  becomes bound by the contract, by  the arbitration
and by the result of arbitration, conceding thereby the capacity of
the  other party to enter into the contract, participate in the
arbitration and cause the implementation of the result.—Indeed, it is
in the best interest of justice that in the enforcement of a foreign
arbitral award, we deny availment by the losing party of the rule that
bars foreign corporations not licensed to do business in the
Philippines from maintaining a suit in our courts. When a party
enters into a contract containing a foreign arbitration clause and, as
in this case, in fact submits itself to arbitration, it becomes bound by
the contract, by the arbitration and by the result of arbitration,
conceding thereby the capacity of the other party to enter into the
contract, participate in the arbitration and cause the implementation
of the result. Although not on all fours with the instant case, also
worthy to consider is the wisdom of then Associate Justice Flerida
Ruth P. Romero in her Dissenting Opinion in Asset Privatization
Trust v.
291
VOL. 667, 291
FEBRUARY 29,
2012
Tuna Processing, Inc.
vs. Philippine Kingford, Inc.
Court of Appeals, 300 SCRA 579 (1998), to wit: xxx
Arbitration, as an alternative mode of settlement, is gaining
adherents in legal and judicial circles here and abroad. If its tested
mechanism can simply be ignored by an aggrieved party, one who, it
must be stressed, voluntarily and actively participated in the
arbitration proceedings from the very beginning, it will destroy the
very essence of mutuality inherent in consensual contracts.
3|Page
Same; Same; Same; On the matter of capacity to sue, a foreign
arbitral award should be respected not because it is favored over
domestic laws and procedures, but because Republic Act No. 9285
has certainly erased any conflict of law question.—Clearly, on the
matter of capacity to sue, a foreign arbitral award should be
respected not because it is favored over domestic laws and
procedures, but because Republic Act No. 9285 has certainly erased
any conflict of law question. Finally, even assuming, only for the
sake of argument, that the court a quo correctly observed that
the Model Law, not the New York Convention, governs the subject
arbitral award, petitioner may still seek recognition and enforcement
of the award in Philippine court, since the Model Law prescribes
substantially identical exclusive grounds for refusing recognition or
enforcement. Premises considered, petitioner TPI, although not
licensed to do business in the Philippines, may seek recognition and
enforcement of the foreign arbitral award in accordance with the
provisions of the Alternative Dispute Resolution Act of 2004.
Same; Same; Same; Foreign Corporations; The foreign
corporation’s capacity to sue in the Philippines is not material
insofar as the recognition and enforcement of a foreign arbitral
award is concerned.—There is no need to consider respondent’s
contention that petitioner TPI improperly raised a question of fact
when it posited that its act of entering into a MOA should not be
considered “doing business” in the Philippines for the purpose of
determining capacity to sue. We reiterate that the foreign
corporation’s capacity to sue in the Philippines is not material insofar
as the recognition and enforcement of a foreign arbitral award is
concerned.
Remedial Law; Civil Procedure; Foreign Corporations;
Petition for Review on Certiorari; Motion for Reconsideration;
Supreme Court has, time and again, ruled that the prior filing of a
motion for reconsideration is not required in certiorari under Rule
45.—Respondent cannot fault petitioner for not filing a,k motion for
reconsideration of
292
29 SUPREME
2 COURT REPORTS
ANNOTATED
Tuna Processing, Inc.
vs. Philippine Kingford, Inc.
the assailed Resolution dated 21 November 2008 dismissing
the case. We have, time and again, ruled that the prior filing of a
motion for reconsideration is not required in certiorari under Rule
45.
Same; Same; Courts; Hierarchy of Courts; A strict application
of the rule on hierarchy of courts may be excused when the reason
behind the rule is not present in a case where the issues are not
factual but purely legal; Moreover, the novelty and the paramount
importance of the issue raised should be seriously considered;
Surely, there is a need to take cognizance of the case not only to
guide the bench and the bar, but if only to strengthen arbitration as
a means of dispute resolution, and uphold the policy of the State
embodied in the Alternative Dispute Resolution Act of 2004.—While
we agree that petitioner failed to observe the principle of hierarchy of
courts, which, under ordinary circumstances, warrants the outright
dismissal of the case, we opt to relax the rules following the
pronouncement in Chua v. Ang, 598 SCRA 229 (2009), to wit: [I]t
must be remembered that [the principle of hierarchy of courts]
generally applies to cases involving conflicting factual allegations.
Cases which depend on disputed facts for decision cannot be brought
immediately before us as we are not triers of facts. A strict
application of this rule may be excused when the reason behind the
rule is not present in a case, as in the present case, where the issues
are not factual but purely legal. In these types of questions, this Court
has the ultimate say so that we merely abbreviate the review process
if we, because of the unique circumstances of a case, choose to hear
and decide the legal issues outright. Moreover, the novelty and the
paramount importance of the issue herein raised should be seriously
considered. Surely, there is a need to take cognizance of the case not
only to guide the bench and the bar, but if only to strengthen
arbitration as a means of dispute resolution, and uphold the policy of
4|Page
the State embodied in the Alternative Dispute Resolution Act of
2004.
PETITION for review on certiorari of a resolution of the
Regional Trial Court of Makati City, Br. 61.
  The facts are stated in the opinion of the Court.
  Bengzon, Negre, Untalan for petitioner.
  The Law Firm of Villanueva, Nueva & Associates  for
respondent.
293
VOL. 667, 293
FEBRUARY 29, 2012
Tuna Processing, Inc. vs.
Philippine Kingford, Inc.
PEREZ, J.:
Can a foreign corporation not licensed to do business in the
Philippines, but which collects royalties from entities in the
Philippines, sue here to enforce a foreign arbitral award?
In this Petition for Review on Certiorari under Rule
45,  petitioner Tuna Processing, Inc. (TPI), a foreign
1
corporation not licensed to do business in the Philippines, prays
that the Resolution2 dated 21 November 2008 of the Regional
Trial Court (RTC) of Makati City be declared void and the case
be remanded to the RTC for further proceedings. In the assailed
Resolution, the RTC dismissed petitioner’s Petition for
Confirmation, Recognition, and Enforcement of
Foreign Arbitral Award3 against respondent Philippine
Kingford, Inc. (Kingford), a corporation duly organized and
existing under the laws of the Philippines, 4 on the ground that
petitioner lacked legal capacity to sue.5
The Antecedents
 On 14 January 2003, Kanemitsu Yamaoka (hereinafter
referred to as the “licensor”), co-patentee of U.S. Patent No.
5,484,619, Philippine Letters Patent No. 31138, and Indonesian
Patent No. ID0003911 (collectively referred to as the
“Yamaoka Patent”),6 and five (5) Philippine tuna processors,
_______________
1 Rollo, pp. 36-59.
2 Id., at pp. 65-75. Penned by Judge Cedrick O. Ruiz, Regional Trial Court,
Branch 61, Makati City.
3 Id., at pp. 105-113.
4 Id., at p. 41. Petition for Review on Certiorari under Rule 45.
5 Id., at pp. 72-75. Resolution dated 21 November 2008 of the RTC.
6 The Yamaoka Patent pertains to “the extra-low temperature smoking
process using filtered smoke on fresh tuna which prevents the discoloration of
the tuna and ensures its freshness during the frozen state.” Id., at p. 41. Petition
for Review on Certiorari under Rule 45.
294
29 SUPREME COURT
4 REPORTS
ANNOTATED
Tuna Processing, Inc. vs.
Philippine Kingford, Inc.
namely, Angel Seafood Corporation, East Asia Fish Co., Inc.,
Mommy Gina Tuna Resources, Santa Cruz Seafoods, Inc., and
respondent Kingford (collectively referred to as the
“sponsors”/“licensees”)7 entered into a Memorandum of
Agreement (MOA),8 pertinent provisions of which read:
1. Background and objectives. The Licensor, co-owner of U.S.Patent
No. 5,484,619, Philippine Patent No. 31138, and Indonesian Patent
No. ID0003911 xxx wishes to form an alliance with Sponsors for
purposes of enforcing his three aforementioned patents, granting
licenses under those patents, and collecting royalties.
  The Sponsors wish to be licensed under the aforementioned patents in
order to practice the processes claimed in those patents in the United
States, the Philippines, and Indonesia, enforce those patents and
collect royalties in conjunction with Licensor.
xxx
5|Page
4. Establishment of Tuna Processors, Inc. The parties hereto agree to
the establishment of Tuna Processors, Inc. (“TPI”), a corporation
established in the State of California, in order to implement the
objectives of this Agreement.
5. Bank account. TPI shall open and maintain bank accounts in the
United States, which will be used exclusively to deposit funds that it
will collect and to disburse cash it will be obligated to spend in
connection with the implementation of this Agreement.
6. Ownership of TPI. TPI shall be owned by the Sponsors and Licensor.
Licensor shall be assigned one share of TPI for the purpose of being
elected as member of the board of directors. The remaining shares of
TPI shall be held by the Sponsors according to their respective equity
shares. 9
xxx
_______________
7 Id., at p. 40. Petition for Review on Certiorari under Rule 45.
8 Id., at pp. 76-83.
9 Id., at pp. 76-77.
295
VOL. 667, 295
FEBRUARY 29, 2012
Tuna Processing, Inc. vs.
Philippine Kingford, Inc.
The parties likewise executed a Supplemental Memorandum
of Agreement10 dated 15 January 2003 and an Agreement to
Amend Memorandum of Agreement11 dated 14 July 2003.
Due to a series of events not mentioned in the petition, the
licensees, including respondent Kingford, withdrew from
petitioner TPI and correspondingly reneged on their
obligations.12 Petitioner submitted the dispute for arbitration
before the International Centre for Dispute Resolution in the
State of California, United States and won the case against
respondent.13 Pertinent portions of the award read:
13.1 Within thirty (30) days from the date of transmittal of this
Award to the Parties, pursuant to the terms of this award, the total
sum to be paid by RESPONDENT KINGFORD to CLAIMANT
TPI, is the sum of ONE MILLION SEVEN HUNDRED FIFTY
THOUSAND EIGHT HUNDRED FORTY SIX DOLLARS AND To enforce the award, petitioner TPI filed on 10 October
TEN CENTS ($1,750,846.10). 2007 a Petition for Confirmation, Recognition, and
(A) For breach of the MOA by not paying past due Enforcement of Foreign Arbitral Award before the RTC of
assessments, RESPONDENT KINGFORD shall Makati City. The petition was raffled to Branch 150 presided
pay CLAIMANT the total sum of TWO HUNDRED TWENTY by Judge Elmo M. Alameda.
NINE THOUSAND THREE HUNDRED AND FIFTY FIVE
At Branch 150, respondent Kingford filed a Motion to
DOLLARS AND NINETY CENTS ($229,355.90) which is 20%
of MOA assessments since September 1, 2005[;] Dismiss.16 After the court denied the motion for lack of
(B) For breach of the MOA in failing to cooperate merit,17 respondent sought for the inhibition of Judge Alameda
with CLAIMANT TPI in fulfilling the objectives of and moved for the reconsideration of the order denying the
the MOA, RESPONDENT KINGFORD shall motion.18 Judge Alameda inhibited himself notwithstanding
pay CLAIMANT the total sum of TWO HUNDRED SEVENTY “[t]he unfounded allegations and unsubstantiated assertions in
ONE THOUSAND FOUR HUNDRED the motion.”19 Judge Cedrick O. Ruiz of Branch 61, to which
_______________ the case was re-raffled, in turn, granted respondent’s Motion
10 Id., at pp. 84-85.
11 Id., at pp. 87-89. for Reconsideration and dismissed the petition on the ground
12 Id., at p. 42. Petition for Review on Certiorari under Rule 45. that the petitioner lacked legal capacity to sue in the
13Id., at pp. 93-99. Award of Arbitrator dated 26 July 2007. Id. at 103-104. Philippines.20
Disposition of Application for Modification of Award of Arbitrators dated 13
_______________
September 2007.
14Id., at p. 103. Pursuant to the Disposition of Application for Modification
296 of Award of Arbitrators dated 13 September 2007, which modified the Award
of Arbitrator dated 26 July 2007.
29 SUPREME COURT 15 Id., at pp. 97-98. Award of Arbitrator dated 26 July 2007.
16 Id., at pp. 184-195.
6 REPORTS 17 Id., at pp. 294-302. Order dated 20 May 2008.
ANNOTATED 18 Id., at pp. 303-326. Motion for Inhibition with Motion for
Tuna Processing, Inc. vs. Reconsideration dated 30 May 2008.
19 Id., at pp. 337-338. Order dated 11 June 2008.
Philippine Kingford, Inc. 20 Id., at pp. 65-75. Resolution dated 21 November 2008.
NINETY DOLLARS AND TWENTY CENTS ($271,490.20)
[;]  and
14 297
(C) For violation of THE LANHAM ACT and infringement of VOL. 667, 297
the YAMAOKA 619 PATENT, RESPONDENT KINGFORD FEBRUARY 29, 2012
shall pay CLAIMANT the total sum of ONE MILLION TWO Tuna Processing, Inc. vs.
HUNDRED FIFTY THOUSAND DOLLARS AND NO CENTS Philippine Kingford, Inc.
($1,250,000.00). xxx
xxx 15
Petitioner TPI now seeks to nullify, in this instant Petition
for Review on Certiorari under Rule 45, the order of the trial

6|Page
court dismissing its Petition for Confirmation, Recognition,
and Enforcement of Foreign Arbitral Award.
Issue
The core issue in this case is whether or not the court a
quo  was correct in so dismissing the petition on the ground of
petitioner’s lack of legal capacity to sue.
Our Ruling
The petition is impressed with merit.
The Corporation Code of the Philippines expressly
provides:
“Sec. 133. Doing business without a license.—No foreign
corporation transacting business in the Philippines without a license,
or its successors or assigns, shall be permitted to maintain or
intervene in any action, suit or proceeding in any court or
administrative agency of the Philippines; but such corporation may
be sued or proceeded against before Philippine courts or
administrative tribunals on any valid cause of action recognized
under Philippine laws.”
It is pursuant to the aforequoted provision that the court a
quo  dismissed the petition. Thus:
“Herein plaintiff TPI’s “Petition, etc.” acknowledges that it “is a
foreign corporation established in the State of California” and “was
given the exclusive right to license or sublicense the Yamaoka
Patent” and “was assigned the exclusive right to enforce the said
patent and collect corresponding royalties” in the Philippines. TPI
likewise admits that it does not have a license to do business in the
Philippines.
There is no doubt, therefore, in the mind of this Court that TPI
has been doing business in the Philippines, but sans a license to do so
issued by the concerned government agency of the Republic of the
7|Page
Philippines, when it collected royalties from “five (5) Philippine tuna
processors[,] namely[,] Angel Seafood Corporation, East Asia Fish
298
29 SUPREME COURT
8 REPORTS
ANNOTATED
Tuna Processing, Inc. vs.
Philippine Kingford, Inc.
Co., Inc., Mommy Gina Tuna Resources, Santa Cruz Seafoods, Inc.
and respondent Philippine Kingford, Inc.” This being the real
situation, TPI cannot be permitted to maintain or intervene in any
action, suit or proceedings in any court or administrative agency of
the Philippines.” A priori, the “Petition, etc.” extant of the plaintiff
TPI should be dismissed for it does not have the legal personality to
sue in the Philippines.”21
The petitioner counters, however, that it is entitled to seek
for the recognition and enforcement of the subject foreign
arbitral award in accordance with Republic Act No. 9285
(Alternative Dispute Resolution Act of 2004),22 the Convention
on the Recognition and Enforcement of Foreign Arbitral
Awards drafted during the United Nations Conference on
International Commercial Arbitration in 1958 (New York
Convention), and the UNCITRAL Model Law on International
Commercial Arbitration (Model Law),23 as none of these
specifically requires that the party seeking for the enforcement
should have legal capacity to sue. It anchors its argument on
the following:
“In the present case, enforcement has been effectively refused on
a ground not found in the [Alternative Dispute Resolution Act
of 2004], New York Convention, or Model Law. It is for this reason
that TPI has brought this matter before this most Honorable Court, as
it [i]s imperative to clarify whether the Philippines’ international
obligations and State policy to strengthen arbitration as a means of
dispute resolution may be defeated by misplaced technical
considerations not found in the relevant laws.” 24
Simply put, how do we reconcile the provisions of
the Corporation Code of the Philippines on one hand, and
the Alter-
_______________
21 Id., at pp. 72-73. Resolution dated 21 November 2008.
22 Republic Act No. 9285 approved on 2 April 2004.
23 As adopted by the United Nations Commission on International Trade
Law on 21 June 1985, and as amended by the United Nations Commission on
International Trade Law on 7 July 2006.
24 Rollo, p. 38. Petition for Review on Certiorari under Rule 45.
299
VOL. 667, 299
FEBRUARY 29, 2012
Tuna Processing, Inc. vs.
Philippine Kingford, Inc.
native Dispute Resolution Act of 2004, the New York
Convention and the Model Law on the other?
In several cases, this Court had the occasion to discuss the
nature and applicability of the Corporation Code of the
Philippines, a general law, viz-a-viz other special laws. Thus,
in Koruga v. Arcenas, Jr.,25 this Court rejected the application
of the Corporation Code and applied the New Central Bank
Act. It ratiocinated:
“Koruga’s invocation of the provisions of the Corporation Code
is misplaced. In an earlier case with similar antecedents, we ruled
that:
“The Corporation Code, however, is a general law
applying to all types of corporations, while the New Central
Bank Act regulates specifically banks and other financial
institutions, including the dissolution and liquidation thereof.
As between a general and special law, the latter shall prevail
8|Page
—generalia specialibus non derogant.” (Emphasis
supplied)” 26
Further, in the recent case of Hacienda Luisita,
Incorporated v. Presidential Agrarian Reform Council,27 this
Court held:
“Without doubt, the Corporation Code is the general law
providing for the formation, organization and regulation of private
corporations. On the other hand, RA 6657 is the special law on
agrarian reform. As between a general and special law, the latter
shall prevail—generalia specialibus non derogant.” 28
_______________
25 G.R. No. 169053, 19 June 2009, 590 SCRA 49.
26 Id., at p. 68 citing In re: Petition for Assistance in the Liquidation of the
Rural Bank of Bokod (Benguet), Inc., Philippine Deposit Insurance
Corporation, v. Bureau of Internal Revenue, G.R. No. 158261, 18 December
2006, 511 SCRA 123, 141 further citing Laureano v. Court of Appeals, 381
Phil. 403, 411-412; 324 SCRA 414, 421 (2000).
27 G.R. No. 171101, 5 July 2011, 653 SCRA 154.
28 Id., at p. 244 citing Koruga v. Arcenas, Jr., supra note 24.
300
30 SUPREME COURT
0 REPORTS
ANNOTATED
Tuna Processing, Inc. vs.
Philippine Kingford, Inc.
Following the same principle, the Alternative Dispute
Resolution Act of 2004 shall apply in this case as the Act, as its
title—An Act to Institutionalize the Use of an Alternative
Dispute Resolution System in the Philippines and to Establish
the Office for Alternative Dispute Resolution, and  for Other
Purposes—would suggest, is a law especially enacted “to
actively promote party autonomy in the resolution of disputes
or the freedom of the party to make their own arrangements to
resolve their disputes.”29 It specifically provides exclusive
grounds available to the party opposing an application for
recognition and enforcement of the arbitral award.30
Inasmuch as the Alternative Dispute Resolution Act of 2004,
a municipal law,  applies in the instant petition, we do not see
the need to discuss compliance with international obligations
under the New York Convention and the  Model Law.  After all,
both already form part of the law.
In particular, the Alternative Dispute Resolution Act of
2004 incorporated the New York Convention in the Act by
specifically providing:
“SEC. 42. Application of the New York Convention.—The New
York Convention shall govern the recognition and enforcement of
arbitral awards covered by the said Convention.
xxx
SEC. 45. Rejection of a Foreign Arbitral Award.—A party to a
foreign arbitration proceeding may oppose an application for
recognition and enforcement of the arbitral award in accordance with
the procedural rules to be promulgated by the Supreme Court only on
those grounds enumerated under Article V of the New York
Convention. Any other ground raised shall be disregarded by the
regional trial court.”
_______________
29 Sec. 2, Republic Act No. 9285.
30 Secs. 42 and 45, Republic Act No. 9285, which adopted the New York
Convention; and Sec. 19, Republic Act No. 9285, which adopted the entire
provisions of the Model Law.
301
VOL. 667, 301
FEBRUARY 29, 2012
Tuna Processing, Inc. vs.
Philippine Kingford, Inc.
It also expressly adopted the Model Law, to wit:
“Sec. 19. Adoption of the Model Law on International
Commercial Arbitration. International commercial arbitration shall
9|Page
be governed by the Model Law on International Commercial
Arbitration (the “Model Law”) adopted by the United Nations
Commission on International Trade Law on June 21, 1985 xxx.”
Now, does a foreign corporation not licensed to do business
in the Philippines have legal capacity to sue under the
provisions of the Alternative Dispute Resolution Act of 2004?
We answer in the affirmative.
Sec. 45 of the Alternative Dispute Resolution Act of
2004 provides that the opposing party in an application for
recognition and enforcement of the arbitral award may raise
only those grounds that were enumerated under Article V of
the New York Convention, to wit:
Article V
1. Recognition and enforcement of the award may be refused, at
the request of the party against whom it is invoked, only if that party
furnishes to the competent authority where the recognition and
enforcement is sought, proof that:
(a) The parties to the agreement referred to in article II were,
under the law applicable to them, under some incapacity, or the said
agreement is not valid under the law to which the parties have
subjected it or, failing any indication thereon, under the law of the
country where the award was made; or
(b) The party against whom the award is invoked was not given
proper notice of the appointment of the arbitrator or of the arbitration
proceedings or was otherwise unable to present his case; or
(c) The award deals with a difference not contemplated by or
not falling within the terms of the submission to arbitration, or it
contains decisions on matters beyond the scope of the submission to
arbitration, provided that, if the decisions on matters submitted to
arbitration can be separated from those not so submitted, that part of
the award which contains decisions on matters submitted to
arbitration may be recognized and enforced; or
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2 REPORTS
ANNOTATED
Tuna Processing, Inc. vs.
Philippine Kingford, Inc.
(d) The composition of the arbitral authority or the arbitral
procedure was not in accordance with the agreement of the parties,
or, failing such agreement, was not in accordance with the law of the
country where the arbitration took place; or
(e) The award has not yet become binding on the parties, or has
been set aside or suspended by a competent authority of the country
in which, or under the law of which, that award was made.
2. Recognition and enforcement of an arbitral award may also
be refused if the competent authority in the country where
recognition and enforcement is sought finds that:
(a) The subject matter of the difference is not capable of
settlement by arbitration under the law of that country; or
(b) The recognition or enforcement of the award would be
contrary to the public policy of that country.
Clearly, not one of these exclusive grounds touched on the
capacity to sue of the party seeking the recognition and
enforcement of the award.
Pertinent provisions of the Special Rules of Court on
Alternative Dispute Resolution,31 which was promulgated by the
Supreme Court, likewise support this position.
Rule 13.1 of the Special Rules provides that “[a]ny party to
a foreign arbitration may petition the court to recognize and
enforce a foreign arbitral award.” The contents of such petition
are enumerated in Rule 13.5.32 Capacity to sue is not
_______________
31 A.M. No. 07-11-08-SC dated 1 September 2009.
32 RULE 13.5. Contents of petition.—The petition shall state the
following:
a. The addresses of the parties to arbitration;
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b.  In the absence of any indication in the award, the country
where the arbitral award was made and whether such country is a
signatory to the New York Convention; and
c. The relief sought.
Apart from other submissions, the petition shall have attached to it the
following:
a. An authentic copy of the arbitration agreement; and
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Tuna Processing, Inc. vs.
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included. Oppositely, in the Rule on local arbitral awards or
arbitrations in instances where “the place of arbitration is in the
Philippines,”33 it is specifically required that a petition “to
determine any question concerning the existence, validity and
enforceability of such arbitration agreement” 34 available to the
parties before the commencement of arbitration and/or a
petition for “judicial relief from the ruling of the arbitral
tribunal on a preliminary question upholding or declining its
jurisdiction”35 after arbitration has already commenced should
state “[t]he facts showing that the persons named as petitioner
or respondent have legal capacity to sue or be sued.”36
_______________
b. An authentic copy of the arbitral award.
If the foreign arbitral award or agreement to arbitrate or submission is not
made in English, the petitioner shall also attach to the petition a translation of
these documents into English. The translation shall be certified by an official or
sworn translator or by a diplomatic or consular agent. A.M. No. 07-11-08-SC
dated 1 September 2009.
33 Rule 3.1, A.M. No. 07-11-08-SC dated 1 September 2009.
34 Rule 3.2, A.M. No. 07-11-08-SC dated 1 September 2009.
35 Rule 3.12, A.M. No. 07-11-08-SC dated 1 September 2009.
36 In relation to a petition “to determine any question concerning the
existence, validity and enforceability of such arbitration agreement” available to
the parties before the commencement of arbitration, Rule 3.6 provides:
 RULE 3.6. Contents of petition.—The verified petition shall state the
following:
a. The facts showing that the persons named as petitioner or respondent
have legal capacity to sue or be sued;
b. The nature and substance of the dispute between the parties;
c. The grounds and the circumstances relied upon by the petitioner to
establish his position; and
d. The relief/s sought.
Apart from other submissions, the petitioner must attach to the petition an
authentic copy of the arbitration agreement.
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4 REPORTS
ANNOTATED
Tuna Processing, Inc. vs.
Philippine Kingford, Inc.
Indeed, it is in the best interest of justice that in the
enforecement of a foreign arbitral award, we deny availment by
the losing party of the rule that bars foreign corporations not
licensed to do business in the Philippines from maintaining a
suit in our courts. When a party enters into a contract
containing a foreign arbitration clause and, as in this case, in
fact submits itself to arbitration, it becomes bound by the
contract, by the arbitration and by the result of arbitration,
conceding thereby the capacity of the other party to enter into
the contract, participate in the arbitration and cause the
implementation of the result. Although not on all fours with the
instant case, also worthy to consider is the wisdom of then
Associate Justice Flerida Ruth P. Romero in her Dissenting
Opinion in Asset Privatization Trust v. Court of Appeals,37 to
wit:
_______________
In relation to a petition for “judicial relief from the ruling of the arbitral
tribunal on a preliminary question upholding or declining its jurisdiction” after
arbitration has already commenced, Rule 3.16 reads:
RULE 3.16. Contents of petition.—The petition shall state the following:
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a. The facts showing that the person named as petitioner or respondent has
legal capacity to sue or be sued;
b. The nature and substance of the dispute between the parties;
c. The grounds and circumstances relied upon by the petitioner; and
d. The relief/s sought.
In addition to the submissions, the petitioner shall attach to the petition a
copy of the request for arbitration and the ruling of the arbitral tribunal.
The arbitrators shall be impleaded as nominal parties to the case and shall
be notified of the progress of the case.
37 G.R. No. 121171, 29 December 1998, 300 SCRA 579.
305
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FEBRUARY 29, 2012
Tuna Processing, Inc. vs.
Philippine Kingford, Inc.
“xxx Arbitration, as an alternative mode of settlement, is gaining
adherents in legal and judicial circles here and abroad. If its tested
mechanism can simply be ignored by an aggrieved party, one who, it
must be stressed, voluntarily and actively participated in the
arbitration proceedings from the very beginning, it will destroy the
very essence of mutuality inherent in consensual contracts.” 38
Clearly, on the matter of capacity to sue, a foreign arbitral
award should be respected not because it is favored over
domestic laws and procedures, but because Republic Act No.
9285 has certainly erased any conflict of law question.
Finally, even assuming, only for the sake of argument, that
the court a quo correctly observed that the Model Law, not
the New York Convention, governs the subject arbitral
award,39 petitioner may still seek recognition and enforcement
of the award in Philippine court, since the Model
Law prescribes substantially identical exclusive grounds for
refusing recognition or enforcement.40
_______________
38 Id., at p. 631.
 39 In its Resolution dated 21 November 2008, the court a quo observed:
“This reliance by TPI solely upon the New York Convention in conjunction
with Section 42 of Republic Act No. 9285 may not be correct. It is apparent
from the ‘Award of Arbitrator’ that the ‘International Centre [f]or Dispute
Resolution’ is a ‘Commercial Arbitration Tribunal’ and hence, it is engaged in
commercial arbitration. Under the third sentence of Section 40 of Republic Act
No. 9285, ‘[t]he recognition and enforcement of an award in an international
commercial arbitration shall be governed by Article 35 of the Model Law [the
Model Law on International Commercial Arbitration adopted by the United
Nations Commission on International Trade Law on 21 June 1985]’ and not the
so-called New York Convention. Rollo, p. 74.
40 Article 36 of the Model Law provides:
 Article 36. Grounds for refusing recognition or enforcement
(1) Recognition or enforcement of an arbitral award, irrespective of the
country in which it was made, may be refused only:
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6 REPORTS
ANNOTATED
Tuna Processing, Inc. vs.
Philippine Kingford, Inc.
Premises considered, petitioner TPI, although not licensed
to do business in the Philippines, may seek recognition and
 (a) at the request of the party against whom it is invoked, if that party
furnishes to the competent court where recognition or enforcement is sought
proof that:
(i)  a party to the arbitration agreement referred to in article 7 was
under some incapacity; or the said agreement is not valid under the law
to which the parties have subjected it or, failing any indication thereon,
under the law of the country where the award was made; or
(ii)  the party against whom the award is invoked was not given
proper notice of the appointment of an arbitrator or of the arbitral
proceedings or was otherwise unable to present his case; or
(iii)  the award deals with a dispute not contemplated by or not
falling within the terms of the submission to arbitration, or it contains
decisions on matters beyond the scope of the submission to arbitration,
provided that, if the decisions on matters submitted to arbitration can be
separated from those not so submitted, that part of the award which
12 | P a g e
contains decisions on matters submitted to arbitration may be
recognized and enforced; or
(iv) the composition of the arbitral tribunal or the arbitral
procedure was not in accordance with the agreement of the parties or,
failing such agreement, was not in accordance with the law of the
country where the arbitration took place; or
(v) the award has not yet become binding on the parties or has
been set aside or suspended by a court of the country in which, or under
the law of which, that award was made; or
(b) if the court finds that:
(i) the subject-matter of the dispute is not capable of settlement by
arbitration under the law of this State; or
(ii) the recognition or enforcement of the award would be contrary
to the public policy of this State.
(2) xxx
307
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FEBRUARY 29, 2012
Tuna Processing, Inc. vs.
Philippine Kingford, Inc.
enforcement of the foreign arbitral award in accordance with
the provisions of the Alternative Dispute Resolution Act of
2004.
II
The remaining arguments of respondent Kingford are
likewise unmeritorious.
First. There is no need to consider respondent’s
contention that petitioner TPI improperly raised a question of
fact when it posited that its act of entering into a MOA should
not be considered “doing business” in the Philippines for the
purpose of determining capacity to sue. We reiterate that the
foreign corporation’s capacity to sue in the Philippines is not
material insofar as the recognition and enforcement of a foreign
arbitral award is concerned.
Second. Respondent cannot fault petitioner for not filing a
motion for reconsideration of the assailed Resolution dated 21
November 2008 dismissing the case. We have, time and again,
ruled that the prior filing of a motion for reconsideration is not
required in certiorari under Rule 45.41
Third. While we agree that petitioner failed to observe the
principle of hierarchy of courts, which, under ordinary
circumstances, warrants the outright dismissal of the case, 42 we
opt to relax the rules following the pronouncement in Chua v.
Ang,43 to wit:
_______________
41 San Miguel Corporation v. Layoc, Jr., G.R. No. 149640, 19 October,
2007, 537 SCRA 77, 91; Bases Conversion and Development Authority v. Uy,
G.R. No. 144062, 2 November 2006, 506 SCRA 524, 534; and Paa v. CA, G.R.
No. 126560, 4 December 1997, 282 SCRA 448.
42 Catly v. Navarro, G.R. No. 167239, 5 May 2010, 620 SCRA 151, 193.
43 G.R. No. 156164, 4 September 2009, 598 SCRA 229.
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ANNOTATED
Tuna Processing, Inc. vs.
Philippine Kingford, Inc.
“[I]t must be remembered that [the principle of hierarchy of
courts] generally applies to cases involving conflicting factual
allegations. Cases which depend on disputed facts for decision
cannot be brought immediately before us as we are not triers of
facts.  A strict application of this rule may be excused when the
44
reason behind the rule is not present in a case, as in the present case,
where the issues are not factual but purely legal. In these types of
questions, this Court has the ultimate say so that we merely
abbreviate the review process if we, because of the unique
circumstances of a case, choose to hear and decide the legal issues
outright.” 45
Moreover, the novelty and the paramount importance of the
issue herein raised should be seriously considered. 46 Surely,
13 | P a g e
there is a need to take cognizance of the case not only to guide
the bench and the bar, but if only to strengthen arbitration as a
means of dispute resolution, and uphold the policy of the State
embodied in the Alternative Dispute Resolution Act of 2004, to
wit:
“Sec. 2. Declaration of Policy.—It is hereby declared the
policy of the State to actively promote party autonomy in the
resolution of disputes or the freedom of the party to make their own
arrangements to resolve their disputes. Towards this end, the State
shall encourage and actively promote the use of Alternative Dispute
Resolution (ADR) as an important means to achieve speedy and
impartial justice and declog court dockets. xxx”
Fourth. As regards the issue on the validity and
enforceability of the foreign arbitral award, we leave its
determination to the court a quo where its recognition and
enforcement is being sought.
_______________
44 Id., at p. 238 citing Mangaliag v. Catubig-Pastoral, G.R. No. 143951, 25
October 2005, 474 SCRA 153,161; Agan, Jr. v. Philippine International Air
Terminals Co., Inc., G.R. Nos. 155001, 155547 and 155661, 21 January 2004,
420 SCRA 575, 584.
45 Id.
46 La Bugal-B'laan Tribal Association, Inc. v. Ramos, G.R. No. 127882, 27
January 2004, 421 SCRA 148, 183.
309
VOL. 667, 309
FEBRUARY 29, 2012
Tuna Processing, Inc. vs.
Philippine Kingford, Inc.
Fifth. Respondent claims that petitioner failed to furnish
the court of origin a copy of the motion for time to file petition
for review on certiorari before the petition was filed with this
Court.47 We, however, find petitioner’s reply in order. Thus:
 “26. Admittedly, reference to “Branch 67” in petitioner TPI’s
“Motion for Time to File a Petition for Review on Certiorari under
Rule 45” is a typographical error. As correctly pointed out by
respondent Kingford, the order sought to be assailed originated from
Regional Trial Court, Makati City, Branch 61.
27. xxx Upon confirmation with the Regional Trial Court,
Makati City, Branch 61, a copy of petitioner TPI’s motion was
received by the Metropolitan Trial Court, Makati City, Branch 67.
On 8 January 2009, the motion was forwarded to the Regional Trial
Court, Makati City, Branch 61.” 48
All considered, petitioner TPI, although a foreign
corporation not licensed to do business in the Philippines, is
not, for that reason alone, precluded from filing the Petition for
Confirmation, Recognition, and Enforcement of Foreign
Arbitral Award before a Philippine court.
WHEREFORE, the Resolution dated 21 November 2008 of
the Regional Trial Court, Branch 61, Makati City in Special
Proceedings No. M-6533 is hereby REVERSED and SET
ASIDE. The case is REMANDED to Branch 61 for further
proceedings.
SO ORDERED.
Carpio (Chairperson), Brion, Sereno and Reyes, JJ.,
concur.
Resolution reversed and set aside, case remanded to
Branch 61 for further proceedings.
_______________
47 Rollo, pp. 427-428. Comment/Opposition on the petition dated 1 April
2009.
48 Id., at p. 459. Reply to “COMMENT/OPPOSITION (Re: Petitoner Tuna
Processing, Inc.’s Petition for Review on Certiorari Under Rule 45 dated
January 23, 2009)” dated 1 April 2009.
0 REPORTS
ANNOTATED
Tuna Processing, Inc. vs.
Philippine Kingford, Inc.
Notes.—Supreme Court adheres to the rule that in the
absence of evidence to the contrary, foreign laws on a
particular subject are presumed to be the same as those of the
Philippines, and following the most intelligent assumption we
can gather, GTZ is akin to a governmental owned or controlled
corporation without original charter which, by virtue of the
Corporation Code, has expressly consented to be sued.
(Deutsche Gesellschaft Für Technische Zusammenarbeit vs.
Court of Appeals, 585 SCRA 150 [2009])
Arbitration, as an alternative mode of settling disputes, has
long been recognized and accepted in our jurisdiction. (Cargill
Philippines, Inc. vs. San Fernando Regala Trading, Inc., 641
SCRA 31 [2011])
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